Koil Energy Solutions Inc

Good morning, ladies and gentlemen. Welcome to Coil Energy's first quarter 2026 conference call. During the presentation, all participants will be in listen-only mode. After the speaker's remarks, you will be invited to participate in a question and answer session. As a reminder, this call is being recorded today, Friday, May 15th, 2026. A detailed disclaimer related to Coil Energy's forward-looking statements is included in the press release issued this morning and filed with the SEC. It is also available on the company's website, coilenergy.com, or upon request. A reconciliation of non-GAAP financial measures used in the press release and on today's call is included in the press release and on the website. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date made. Coil Energy also undertakes no obligation to revise any of its forward-looking statements to reflect events or circumstances after the date made. At this time, I'd like to turn the call over to CEO Eric Wieck. Please go ahead.

Good morning, everyone. Thank you for joining us today. In this briefing, I'll be presenting an overview of our financial performance for the first quarter of 2026. I will also share our renewed growth strategy towards 2030 and discuss how Coil Energy is planning to accelerate for the growth. Finally, I'll be happy to answer any questions you may have. Kurt Keller, Chief Financial Officer of Coil Energy is joining me and he will provide more details on the numbers. I'm extremely proud of the Coil team delivering another record revenue for this company. In this quarter, we achieved revenue of $8.2 million, representing a 56% year-over-year increase in quarterly revenue and 13% sequential growth from the fourth quarter of 2025. This was driven by a winning sales team and an outstanding operations crew. It represented doubling of revenue from fixed-price contracts as well as an incremental increase from service projects. EBITDA was approximately 572,000, which is 69% higher year over year. This improvement was driven by increased volume and was partially offset by expenses related to our growth initiatives. COIL remained focused on long-term growth by funding development of intellectual property, the establishment of our Brazil operations, and responding to the increasing number of requests for quotations globally. We are preparing to capitalize on the opportunities ahead. These investments are clearly contributing to positive top-line growth. We also incurred several expenses in this quarter that we do not expect to repeat in future quarters. I'll now turn the call over to our Chief Financial Officer, Kurt Keller.

Thank you, Eric. For the three months ending March 31st, 2026, Coil Energy generated revenues of $8.2 million, a 56% increase compared to revenues of $5.3 million for the same period last year. Gross profit for the quarter doubled $2.6 million, or 32% of revenues, representing a one percentage point increase in gross margin compared to $1.7 million for 31% of revenues in the first quarter of 2025. Sequentially, quarter over quarter, gross profit was maintained at approximately the same level. Selling general and administrative expenses during the quarter equaled $2.3 million, up $611,000 from the prior year, mainly due to increased headcount from 64 in the first quarter of 2025 to 79 full-time equivalents this quarter with significant increases within sales and administration. A more meaningful comparison is the quarter-over-quarter comparison, which represents an increase of $230,000. This sequential increase was primarily driven by one-time charges related to the year-end audit and marketing costs. Audit expenses were elevated because of new teams and our new ERP system requiring additional effort to ensure accurate and prudent reporting. Our marketing spend was related to the subsidy tieback conference. Neither of these costs will recur in the remaining quarters of this year. Moving to net income, we reported a gain of $241,000 for the first quarter, which translates to cents earnings for fully diluted share. This compares to a net loss of 29,000 in the first quarter of 2025. EBITDA for the current quarter was $574,000, which was $235,000 higher than the prior year period. This increase was mainly driven by higher volume. Now turning to our balance sheet, as of March 31, 2026, we reported $5.1 million of working capital, including $1.2 million in cash and $7.5 million in net receivables. This compares the $4.8 million in working capital at year end 2025 with $1.5 million in cash and $4.8 million in net receivables. The shift is primarily due to the timing of billing and collections tied to fixed price contract milestones. I would like to acknowledge that this quarter's record performance in operational throughput was exceptional and can only be credited to the great team we have here at Coyle.